'Protectionist' Obama Escalates Trade War, Slams China With Subsidized Aluminum Complaint

With all the partisan narrative defining Trump as a tariff-setting, anti-trade, economy-buster, we thought it ironic that free-trade-wunderkid Obama just escalated trade wars by bringing his administration's 16th trade-enforcement complaint against China with WTO, urging tariffs on subsidised Chinese aluminum, after accusing them of funneling artificially cheap loans from state-run banks to producers.

Despite declining global aluminum prices, China has increased production 154% over the past eight years while upping capacity by 243%, according to the U.S. government.

As Bloomberg reports, the complaint says China has harmed U.S. interests by artificially expanding Chinese capacity, production and market share, resulting in a significant lowering of the global price for primary aluminum. It is the 16th trade enforcement challenge President Barack Obama’s administration has launched at the WTO against China.

“This latest challenge once again demonstrates the Obama administration’s unwavering commitment to ensuring a fair and level playing field for American workers and businesses,” U.S. Trade Representative Michael Froman said in a written statement. “Artificially cheap loans from banks and low-priced inputs for Chinese aluminum are contributing to excess capacity and undercutting American workers and businesses.”

In a statement very reminiscent of Trump's rhetoric on 'fair' not 'free' trade, President Obama noted he U.S. under his tenure has filed more enforcement complaints in the WTO than any other country and has won every one that’s been decided...

America succeeds when our workers and businesses have a fair shot to compete in the global economy. That’s why when other countries cut corners and break the rules on trade, my Administration stands up for strong trade enforcement,” Obama said.


“China gives its aluminum industry an unfair advantage through underpriced loans and other illegal government subsidies. These kinds of policies have disadvantaged American manufacturers and contributed to the global glut in aluminum, steel, and other sectors.”

As The Wall Street Journal reports, the complaint would represent an escalation of trade disputes between countries with the world’s two largest economies almost a week before Donald Trump assumes the U.S. presidency. Mr. Trump suggested again Wednesday in a news conference that trade relations with Beijing would be a top priority, saying the U.S. trade imbalance with China was too large.

The complaint accuses China of funneling artificially cheap loans from state-run banks to Chinese aluminum producers, helping the companies upgrade their facilities and expand production, the people said. China also subsidizes aluminum production by providing producers with cut-rate coal and electricity, the complaint says, according to people familiar with it.


Donald Trump, who will be sworn in as the president’s successor next Friday, has vowed to pull out of or renegotiate free trade deals he argues allow Chinese market manipulations. During a press conference Wednesday in New York, Trump said China had “taken total advantage of us economically” and vowed the leadership in Beijing “will respect us far more” under his presidency.

So the timing of this escalation of trade disputes appears to be just another example of the Obama administration's "smooth transition" efforts to leave behind chaos for the Trump administration (even if this effort seems to fit with Trump's "fair" trade rhetoric).